Good morning. Happy Friday. Heck of a week, huh?
The Asian/Pacific markets closed mixed and with a bullish bias, but India, South Korea and Taiwan lost more than 1%. Europe is currently trading mostly up. Switzerland is up over 4%; Belgium 3%; and France and Germany more than 2%. Futures here in the States point towards a moderate gap up open for the cash market.
Last night, the short selling of stocks in Belgium, France, Spain and Italy was banned. Many bank stocks hit their lowest levels since the financial crisis, so this is the response. Also, overnight borrowing jumped to its highest level in three months – a sign many banks may need cash. Banning short selling helps in the near term to boost prices and if the markets continues down, they’ll move down slower, but overall, it does nothing to change the pathetic balance sheets of the banks. It does nothing to deal with bad loans on the books and leverage that still exists.
If the market falls here in the States, the same thing will likely be done. It can’t happen now because it would signal things are monumentally worse than currently believed. But it will happen if a bear market fully materializes.
It’s been a heck of a week. The S&P has traded in a 50+ point range everyday. This is great for day trading but not so great for swing trading. If you’re long, you feel great one day and horrible the next. Same with those who are short. You go back and forth between feeling like you nailed it perfectly to feeling like you totally screwed up. Whatever you think will happen, just wait, it’ll happen eventually.
The charts are broken. My bias is to the down side, but I’m not short the market. I want a bounce. But if such a bounce comes with lots of energy and enthusiasm and good longs start to surface, I may have to change my mind. I’m not one for digging in and holding an opinion when it’s obviously wrong. Right now I’m looking to short a bounce, but I’m going to be flexible and open-minded and if the market wants to rally, by all means, let it rally.
Don’t chop your account. More after the open.
headlines at Yahoo Finance
today’s upgrades/downgrades
yesterday’s sector performance
this week’s Earnings
this week’s Economic Numbers
0 thoughts on “Before the Open (Aug 12)”
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I keep hearing about the similarities to August 2010 with this August 2011. Look at that SPX chart from last year… Are we going to have a similar September? buy, buy, buy???
Fundamentals still point down Big, but some Companie’s doing very well, so a great opp to Buy in the (big) dips with long intentions……
Chuang-tzu, a disciple of Confucius, was fishing one day in
the P’u River. [translation: Howard, a disciple of Zen master
was fishing one day in the Mississipi River.]
The prince of Ch’u sent two high officials to ask him if he
would take over the administration of the state of Ch’u.
Chuang-tzu ignored them and went on fishing. Pressed for an
answer he said, “I have heard that in Ch’u there is a sacred
tortoise, dead now these three thousand years. The prince keeps
this tortoise locked in a chest on the alter of his ancestral
temple. I ask you: Would this tortoise rather be dead and
venerated, or alive wagging it’s tail in the mud?
” Alive, wagging it’s tail in the mud,” the official said quickly.
“Begone! said Chuang-tzu. “I too will wag my tail in the mud!”
So you’ll be mud wrestling this weekend. What’s your stage name, Hunk Howard?
Count me in Jason’s camp as far as his analysis goes. I’ll add a few comments. In the major avverages, Jason’s 20 month SMA (or my 80 week SMA) has been broken to the downside. More importantly, the 20 month (80 week) SMA has flattened out while the 50 and 200 day SMAs have or are turning down. That’s sufficient for me to believe the longer term trend has turned down. Other technical indicators are oversold, so this reversal off on the TUES low is not unexpected. But as Jason says, from a technical perspective, any rally has to be considered a bear market rally until proven otherwise.
I still blieve that a more significant rally can develop, but only after a lower low. So, this rally should be watched carefully if it reaches SPX 1200-1220 (in my opinion). Signs of a failure at that level should be followed by a retest of 1100 at the least or a breach of that level. Then, it may be a good opportunity to get long for a larger rally or cover short positions.
Bear food.
“According to experts we would need 145,000 jobs added on average every month for 5 years to get down to a still unappealing 8% unemployment rate.”
u dont give up do u neal—the mind set of buy hold pray
You forgot the dividends Aus. That makes the strategy, holding collateral with dividends, acceptable. Do you do Covered Calls Neal? I’m sure you know, but some here might not be familiar with that dividend strategy.
Neal – have you allowed for “global warming” in your ski business plan?
It’s collateral Neal you don’t care if it goes up or down in price. It will always have value. Besides, if its going down you won’t be assigned and you can write ITM. Geez, I thought you’d figured that out by now.
Simple, list those that went down the least last week. Forget the dividends Neal, write the Call you don’t care if you’re assigned. there’s lots on the list and you’ll make that much more. Geez!
Daytrading’s easier, less stress.
Neal – I like to run a screen for the energy, utility, food & health sectors looking for a minimum 5% dividend yield, P/E of 10 or less with a balance sheet showing low debt and good cash flow to support the dividend. I also like closed end funds in the same sectors trading at a discount to NAV of 10% or more. I’ve had client (as well as my own) portfolios in these types of investments for the past 10 years drawing sustainable income flows, taking occasional long term capital gains and using hedging strategies (based on longer term technical analysis tools) to mitigate downside volatility. That’s my INVESTMENT strategy. In my own accounts (not my clients’) I use 1×1 and 2x ETFs (both long & short) to “trade” the markets on an intermediate term to longer term basis when & where I think I see a favorable trading opportunity.
I’m semi-retired and work from my home office. My clients are near to or in retirement so they know and are comfortable my “strategies” which are based on a “do no harm” investment point of view where my clients are concerned. Now you all know where I’m coming from when I comment!
if we have a 30’s style crash ,which is inevitable,–do u realy think that alpha stuff is going to work—the baby will be thrown out with the bath water
it may be ok for a large fund for a while,but not for a small investor,best out of equities out of usa—what happens if hyper inflation hits–usd ect –lots of other things
im not angry with neal im angry with myself—many years ago i used to have the fundamentalist value orientated,dividend,single minded approch and mind set
no one could tell me anything –especially that big co’s can go bust
what u are about to experiance in usa and europe is beyond beleif
PeteM –please tell Howard—mr hindsite R.ELLIOTT is only of use as a intermediate to long term ind–so good short term or in a corrective phase—to many possibilities
no trading tonite—those high frequency computers are at it again for a few cents a trade profit–to choppy–even the euro has the same pattern
but those computer trades dont make profit in a trend day
from a investment view its all about yeild
yeild corrolates to currencies to equities thats the food chain
but what if the yeilds are being manipulated
no we dont have a inverted yeild curve yet –why ,because the fed owns all the bonds
and china/japan a few
back to sleep//hava good w/e
this site is actually for swing traders
and i like it that way
this is not a investment seminar
Well put Aus, but as long as they trade and don’t proselytize I don’t have a problem.
Having a portion of your portfolio in longterm fixed incomie stuff is not a bad idea as long as you get dividends and/or sell calls.
my point was –not in the usa –they are going to be taxed out of existance
to write or sell a covered call only means u have to be willing to loose the mother stock at strike price
etfs take to much commision –use cfds
in the past, to identify oversold and turning points you have displayed numerous indicators such as $nya200r and $nya50r etc.etc and compared them to other oversold times to allow you to come to a conclusion that the markets are at an extreme and therefore are likely to reverse direction.
On Monday a number of indicators were at what I call panic levels and so far the market is up from those levels. In 2008/9 the individual charts look terrible to but is that not a common occurrence at major turning points?
Maldoror
yeah everyone seems to cry when the market gets to a buy point which always turns me off. then the train leaves the station without me, what I hate is the point of recognition is always too late, even on an active blog like this.